SBP’s foreign exchange reserves cross $4bn mark

KARACHI: The foreign exchange reserves held by State Bank of Pakistan (SBP) increased by $487 million, crossing the $4 billion mark, ARY News reported on Thursday, citing data issued by the central bank.

According to a statement issued by SBP, its foreign exchange reserves have increased by $487 million to $4,301 million as of the week ended March 3, which will provide an import cover of around a month.

The statement noted that the central bank received $500 million from the Industrial and Commercial Bank of China (ICBC) as part of the institution’s $1.3 billion facility.

This is the fourth successive increase in the forex reserves on a weekly basis. Meanwhile, the net foreign reserves held by commercial banks stood at $5.4 billion, bringing the country’s total liquid foreign reserves to $9.75 billion.

Last week, foreign exchange reserves held by the SBP increased $556 million to $3.81 billion after China Development Bank rolled out a $700 million loan facility.

Pakistan is eyeing to reach an agreement with the International Monetary Fund (IMF) that would not only lead to a disbursement of $1.2bn but also unlock inflows from friendly countries.

The International Monetary Fund (IMF) had asked Pakistan to implement demands before reaching a staff-level agreement for the revival $7 billion Extended Fund Facility (EFF) stalled for months.

‘Staff-level agreement’

Earlier in the day, Finance Minister Ishaq Dar said that the staff-level agreement with the IMF is expected within next two days.

Addressing a seminar in Islamabad, the finance minister said that the incumbent government has inherited the economic crisis and is taking steps to revive the country.

He lauded the role of the World Bank in Pakistan’s economy adding that the Asian Development Bank is key development partner of the country.

“We want to stabilize the national economy in new budget and intend to scale down challenges for general public in the next budget,” he vowed. Federal Minister promised to overcome current economic problems soon.

Moody’s cuts Pakistan’s credit rating

On February 28, Moody’s Investors Service (Moody’s) downgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa3 from Caa, citing increased fragile liquidity and external position.

In a statement, Moody’s said it has also downgraded the rating for the senior unsecured MTN programme to (P)Caa3 from (P)Caa1. Moreover, the rating agency has also changed the outlook to stable from negative.

“The decision to downgrade the ratings is driven by Moody’s assessment that Pakistan’s increasingly fragile liquidity and external position significantly raises default risks to a level consistent with a Caa3 rating,” the statement noted.